Guoxin Technology (688262)
The core technology is autonomous and controllable, and there is no termination risk in the instruction set architecture. Whether the instruction set architecture can be used and updated independently is the soul of the computing chip company. The company does not rely on any architecture authorization, which is a huge advantage: 1) Motorola and IBM authorize the company’s instruction architecture for a long time. 2) Further IP core development based on the architecture is independent. 3) Power and risc-v instruction set architectures are open source successively. The development of embedded CPU based on the above open source instruction architecture makes the company not limited to instruction and architecture authorization.
Twenty years of accumulation and intergenerational accumulation of technology have formed a stable business model. Computing chip is the most difficult in the chip subdivision category, which requires a long time of technology accumulation and user feedback. The company provides three services: IP authorization, customized chip and independent chip to promote interaction. The three can learn from and confirm each other in terms of engineering experience, quality management and product reliability maturity, so as to ensure the success rate, technical stability and reliability of chip design. It is also conducive to the company’s technical route always being highly consistent with the market demand and continuous iterative upgrading: 1) self-developed IP is the core and an important factor to ensure self-control. 2) The first step of self-development is to understand the needs of customers, and the most beneficial step is to extend self-development to the downstream. 3) Independent chip is an important business for the company to increase the total scale of revenue and gross profit after fully understanding the market demand.
Favorable timing, location and people, MCU out of stock + company dimensionality reduction attack, vehicle regulation MCU large volume: 1) MCU out of stock + price rise. The global MCU market scale is about 15-20 billion US dollars. Benefiting from the trend of automobile electrification and intelligence, the demand continues to increase. Since 20q3, the global MCU has entered a rare out of stock state in history, and the MCU prices of Gigadevice Semiconductor (Beijing) Inc(603986) , st and other manufacturers have increased 6-10 times. 2) The pace of domestic substitution has been greatly accelerated. 3) Dimensionality reduction attack: embedded CPU starts and MCU gets on the bus quickly. Computing chip can be called the most difficult segment of semiconductor. Guoxin technology started from embedded CPU and has solved the most difficult part.
Investment advice
We expect the company’s revenue to be RMB 822 / 1538 / 2818 million (+ 101.7% / + 87.1% / + 83.2%) from 2022 to 2024 respectively; The net profit attributable to the parent company was 134 / 224 / 322 million yuan (+ 90.2% / + 67.6% / + 43.7%). The latest closing price corresponding to PE is 47 / 35 / 26 times respectively. The company is deeply engaged in three fields: information security, automotive electronics and industrial control, edge computing and network communication. Under the background of domestic substitution, the performance is expected to achieve sustained and rapid growth and maintain the “buy” rating.
Risk tips
The order is not completed as expected; Product R & D progress is less than expected; Customer expansion was less than expected.
